The real meaning of value in trading relationships

Purpose The paper aims to survey the main usages of the term “value” in the economics, marketing, strategy and operations fields. Design/methodology/approach The way in which all four fields adopt an unbalanced approach, concentrating exclusively on the customer's perspective, is highlighted. A complete, balanced analysis including both the customer and supplier perspectives is outlined. The precise meaning of the term value is then explored in detail, revealing and exploring the difference between the potential and realised versions. Findings These insights are applied to an analysis of the concept of the “value chain” leading to the conclusion that, given the ontology of value, much of the language used to describe value and chains is deeply misleading. Practical implications The paper ends with a discussion of the possible effects of this ontological and linguistic sloppiness on practitioners and business practice. By bringing clarity to the real meaning of value in trade it may be possible to improve the effectiveness of the use of the word by management as a motivational tool for enhancing company performance. Originality/value The paper offers a clear, detailed explanation of the nature of value in trading relations.